Value Investing vs. Speculative Investing
While you contemplate a major investment decision, you need to ask yourself if you will be making a value investment or a speculative investment. You can use Benjamin Graham’s extensive writing about the difference between value and speculative investments to...
Dividend Discount Model Example
The Dividend Discount Model (Gordon Equation) calculates the intrinsic value of a stock based on the present value of a company’s future dividends. The model is a powerful investing tool to evaluate if a stock is over or undervalued compared...
10 Value Investing Rules to Remember
Merril Lynch’s David Rosenberg predicted the recession in January of 2008, when the downturn was in its infancy and the Dow Jones was only down about 10%. Rosenberg gave credit for his great insight to Merril Lynch’s former investment analyst...
How to Create a Medium Risk Portfolio
This post focuses on a technique to attain medium risk in your portfolio with a value investing approach. “Medium risk” seems to be an elusive term, which was well illustrated in the bear market of 2008. In Nassim Taleb’s book he...
What is a Ponzi Scheme?
The Madoff scandal may have you asking: What exactly is a Ponzi scheme? The essence of a Ponzi scheme is better known today as a pyramid scheme. In 1920, a Boston investment broker named Charles Ponzi told investors that he could earn...
Madoff, “Hmm.. let’s report 36.2% gains “
“I really think very highly of him, people make mistakes,” wrote a Madoff confidant and NYSE broker. At a party over the weekend I met a nice girl from Boston University, and I forgot to ask for her number when...
Verizon – Stocks That Can Defend High Dividends
In October, Verizon Communications (VZ) raised their quarterly dividend 7% to $.46 a share from $.43 cents, with a dividend yield at today’s price now 5.67%. Verizon should be able to defend its dividend in the next 12 months. The...
Benjamin Graham on Market Behavior
In Security Analysis, Benjamin Graham emphasizes the importance of not only focusing on a firm’s potential and accounting statements, but to also pay great attention to the business cycle. Individual investors should research and create their own one year outlook...